stuart: we talked a lot about the obama sell-off, the post-election sell-off. one of the biggest victims, call the company of victim, is apple. as of right now is around $525 a share. that means it is down 25% from the all-time high which is around $705. mutual funds, hedge funds have been dumping the stock. apple is a prime example of this sell-off because a lot of people have made a great deal of profit on apple. if you so, take the profits, we expect to pay if you sold this thing next year, you pay a lower dividend tax and a lower more importantly capital gains tax. let's bring you in on this. look like apple is going to open

around 527, roughly you there. that is not much of a bounce back. nicole: so many issues are happening. the first one in the center, the fiscal cliff as you are noting when you talk about dividend and the taxes that are set to ensue next year in 2013, we're seeing the selling, and telecom and that is the trend, those are the ones that would be directly affected. as far as apple is concerned $7 is a high. the question is when are they getting back to those levels, hedge fund managers getting out, and are we waiting for another product? stuart: what new revolutionary product has apple on the horizon which would lifted back to $700

a share? it is down 8.5% just above the election day. tax advantage of selling now. nicole: you could do a whole show, state tax, a payroll tax, it is your show. no ahead. stuart: if you sell now and take your profit now you pay 15% capital gains tax. if you wait until next year and president obama wants you to pay 23.5% capital gains tax. same store with dividends. not that that applies to apples but the capital gains tax avoidance is creating this selling wave for apple known. nicole: that is exactly right. when you are talking about stocks where you see a nice run-up in gains and apple is one of them and apple is a household name you don't need to be reading the report, if you are excited about a new product and go to the store and see the line about side you know it is a hot

stock. stuart: we have been hovering this for years. thank you very much. back to the opening bell with you. as we said the rich are cashing out. all kinds of people are cashing out of assets which of gone up in value to take advantage of lower tax rate this year. how about selling mansions? luxury homes? are they doing that? joining us this team investment, a frequent real-estate guide on "varney and company". is my basic premise right? are not necessarily just rich people, but money in the housing market selling now, the lower capital gains tax rate? >> not necessarily. real-estate is a case by case situation. to go to your point there are some situations where people are selling off. i had several large companies with both packages, hundreds of homes that they need to get rid

of before the end of the year to avoid that. when we are talking about a single family home and the wealthy they understand several things that the general public doesn't and this is why it is so important to have a good real-estate professional and great accountant. stuart: it is a commercial. >> here you go because this is what people don't understand about real-estate. it is leverageable. the wealthy probably have primary and secondary home in a trust and it is not going anywhere. is going to be down to generations and secondly if it is not and they need to do something with it is leverageable where they can buy other things and put money in other places and you never take a gain on real estate. and to create a lot of flow. [talking over each other] stuart: you are correct your identifying different markets.

if you have invested i will have a lot of property as an investment, but you can make sense to sell this year to get the lower capital gains tax rate. your own private house, that is a separate case and that is the case you are making. that is not where you sell capital gains tax. nicole: you have to remember with your personal and you get a tax break of $5,000 right off the bat and there's a big difference when you talk about investment real-estate between ordinary income and capital gains so your rental income is going to be taxed as ordinary income but you have a lot of things to write off against that. your capital gain is when you sell and that could potentially go up but you don't need to take a profit on your real estate. stuart: you are the elite person who could convert it three minute interview into a three minute commercial.

you do it so well. thanks for joining us. i know is early where you are. we appreciate it. president obama told a critical meeting on the fiscal cliff today at the white house but no matter what i am saying it will be higher tax rates for the rich in the new year. markets don't like it. opening bell next.

stuart: the news background that will affect the market today, hostess gone, liquidated, no impact on markets whatsoever. more trouble in gaza, probably no major market index on stocks. the real free-market factor here is the ongoing obama post-election sell-off. down 700 points since the reelection of barack obama. where do we open this friday morning as we close out week? we will probably be ever so slightly higher. that is not much of the gain after a 700 point loss. a modest move up, i would buy everybody to watch for any leaks in headlines coming out of that meeting with the white house with president obama and congressional leaders. it is on the fiscal cliff. any week that comes out of there will probably affect and move the market. when is the last time you use a pc? may be like a lot of people you

switched your computing to a smart phone. dell, very big name in pcs looking bad because of the weaker pc market. where are we? nicole: it is down 3% again. we are hearing the story we have heard on "varney and company" for several quarters, week pc demand. dell is trying to change its business and grow revenue in the coming quarter. what it means is there numbers plunge nearly half, 47%. that is why you are seeing down arrows. stuart: way below $10 a share. thanks very much. the opening trend on wall street dead flat, we are down three points. the national debt, $16.2 trillion and rising fast. we know this is a major issue for many viewers, may be the biggest issue for you.

we are spending money now, saddling future generations with massive debt that we will not be able to repay. here's what union leader richard trumka said about the national debt. the national debt is not a short-term crisis. this is what president obama said on david letterman in september. we don't have to be worried about it short-term. both of them talking about the debt. are they right? joining us is americans for tax reform. i could say the president and richard trumka have a point. we are not going to have a debt crisis next week or next month. not even next year. very cheap to keep borrowing money, interest rates at all time record lows. why worry about it? why should i worry about it? >> the president and from the are right, not massive drivers we are not addressing. we are not looking at medicare or social security.

these are things that ultimately will bankrupt the country. the thing that makes me concerned hearing this from left-wing leaders, hearing this from the president is to say we don't need to deal with the problem is to ignore the massive spending obama has presided over and for him to ignore that presents a problem for us now. wheat -- interest rates are low but in no way are we an economy not beleaguered by big government and tax hikes and to that. stuart: as i listen to these negotiations going on over this fiscal cliff, i hear richard trumka really loud and clear saying borrow, keep borrowing. you must not cut spending on medicare and medicaid, you can tax the rich, but you got to keep spending. we don't care about the debt. we are on the same lines here. that is really dangerous. >> i agree with you entirely.

look at the president's fiscal commission, the same simpson-bowles plan emerge from that. from of voted against it. he said it did too much, it cut too much from the entitlement programs, too much to cut back on government spending and the leader of the labor movement doesn't want to see his project cutback, doesn't want to see federal stimulus -- stuart: he wants the new infrastructure stimulus. >> you had democrats -- stuart: i have a lot of red ink news, i will get to your comment in the second. the federal housing administration posted deficits of $13.5 billion, it may require a bailout. item 2. if you think the $5 billion loss from the postal service last year was big, this year it lost almost $16 billion. raising stamps the penny will

not fix that. two red ink items. i suspect there will be bailouts. thirteen billion fha, sixteen billion post service, that is government spending. >> f h a is hardly a surprise given president obama promised all of these recovery measures to get the housing market back on track and hardly spent for all the spending he did hardly spend a penny out of a lot of programs. the fact that fha is having problems is not a surprise. in terms of the post office we have a lot of problems for years and we have seen the writing on the wall but we refuse to confront these costs and this is another good example where we have a lot of labor problems, 80% of the post office costs come from labor agreements and the burden they take on with workers and the fact they're unwilling to make successions. they are crushing the entire program.

stuart: a lot of our viewers are saying $16 billion to the postal service, that is peanuts. we are borrowing $3 billion every single day. if you keep the postal service going with a $16 billion bailout that is the inclination because you can't read your arms around these massive numbers. >> the thing viewers need to take away is this is endemic, a problem we are pushing by the wayside. you have post offices for a majority of what is happening at the federal level, and they can stand on their own two feet, and the post office is a perfect example. stuart: we have to wait for another day but we have to pose this question. can any politician get elected or certainly reelected if they say i am going to cut this, cut that, cut services which you like. can you get reelected?

>> look what happened last week. we had a house of representatives that pledged to do just that, cut federal spending but save these entitlement programs. that is the difference between republicans and democrats. republicans have a plan, the paul ryan plan to save these mandatory spending programs where democrats bankrupt them. stuart: we listened to you. we have senator tom coburn releasing another report on government waste. the department of defense spending billions on nonmilitary research. i will call them outrageous projects. jesus saving fictional space aliens. can you believe this? money was spent on that. find out how much. that will be new at 10:00. gap went down the tubes. however, the stock today is way up. >> went down the tubes?

>> it lost favor. >> it really was out of favor. the story has completely turned around. number one on the s&p, quarterly profit jumped up again. this quarter up 60%. they put in a turnaround plan last year, they ousted the top designer and expanded abroad and you know how much they're a year to date? 85%. anyone of our viewers say 85%, i will take it and maybe even pay taxes on it. stuart: thanks very much. the dow is dead flat and as we always say time is money so here is 30 seconds worth of that, those 5 our energy drinks mentioned in 13 deaths reported in the last four years, with

these avoid these drinks. where should you put your money? gold, treasuries, risk involved in all of them. the very rich are buying art. we have someone from christie's auction house coming today. more than a million people collect social security disability for mood disorders. private investigator, will be here but even he cannot prove mental illness, can he? we will see. e-mail us at varney@foxbusiness.com. it is friday morning, we have seven early movers, it is not just dull, but marvel profit down, profit was declining, weaker pc demand on the same boat but that stock is dead flat. better than expected apple telecom equipmentmaker, is down, the clothing retailer gap raise profit outlook, really doing

well up 3%, 85% on the year. why the loss, weaker sales at sears, stock is down $5, 5%. the chinese internet company n sinar david disappointing outlook ended down 10%. and offered to buy shift nutrition and that could shift nutrition up 28%. the casino operator penn national said it plans to split its business into two publicly traded companies and that one is up 31%. the dow industrials 11 points higher. charles payne when done quite a rant in response to mitt romney's excuse for using the election. our viewers loved it so much we're bringing back charles and we will replay the rand. charles will have more on that in a moment.

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stuart: industrial production down 0.4% mainly because of fannie. the dow is down 14 points. that is a response of industrial production numbers. the price of oil holding steady. trouble in gaza keep soil around $86 a barrel. we want to bring you some of yesterday's "varney and company" fire. mitt romney told his donors he couldn't compete with, quote, gifts president obama was offering. that did not sit well with charles. listen to this.

stuart: charles: mitt romney had to explain and yell those are wooden horses. they are not gifts, there wouldn't horses. don't let the man. he is lining about this, sitting a parents' basement until 27 is not a gift. it is the curse. having qualified for health care's not a gift, it is a curse. stuart: the viewers love it when you get fired up and you are back for more. charles: back for more. got a lot of e-mails. most people did agree. people are frustrated. these are republicans, conservatives, people who really felt mitt romney allowed himself to be painted as a disinterested rich guy, didn't fight back early and against allegations that bain capital make the connection between why free-market and capitalism are so important for this country. stuart: mitt romney was right in saying all kinds of gifts to various blocks of people helped president obama win reelection but he was wrong in not identifying the problems with those gifts.

that is your point. charles: some of the post-election analysis from people in the republican party and some in the media that there are people out there that just one free stuff, that is a little bit -- we all want free stuff. we all want gifts. what are they fighting about in washington right now? people say isn't 12% capital gains tax against 30% income tax the get? to say these people want gifts we all want gifts but you have to make people understand is what you are getting really get? to you or your family or the country? that is where mitt romney failed to articulate the message. you go back down and say you are a miniature, can i get your vote, doesn't work. you are a taker, look for you on tuesday.

stuart: question. could the twinkie really be dead. we do have a great american company and has been killed as of today by the unions. hostess says it will liquidate, gone, out of business. could not reach a deal with its unions. the company hostess wanted concessions from the unions. one particular union, the bakers union held a vote and they said no, no concessions. that puts hostess into liquidation. charles: all the other unions finally came around. all of them said this is crazy. we pushed this to the press of this. this company will go out of business and one small minority out there, cuts for everyone, management, across the board cuts, you contribute a little bit more. i have seen this. i saw this with the largest trucking company in america and automobile industry and the airline industry. kenyans there was a time we needed unions and it has gone to

the point where they really risk pushing industries or individual companies out of business. stuart: $1 says someone buys a brand name. they are not going to go away. charles: absolutely. i am one of the same bakers to get the job in the news place. stuart: morning will report. where are we? above 1700, 1715 precisely per ounce. the new york times writes the scathing review of celebrity chef guy pierre's times square restaurant, scathing. rings and foods that pays like nuclear waste. how about now? the man, the chef is firing back. monica crowley and gerri willis i here to talk about that next. i always wait until the last minute.

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stuart: breaking news j. p. morgan -- jpmorgan close to settling with the sec, $250 million of settlements. this is about the sale of mortgage-backed securities by bear stearns.

the number to watch for, $215 million. celebrity chef guy the air is responding to a negative review in the new york times of his restaurant. the times absolutely killed his new times square restaurant. the food was bad, served cold and the drinks tasted like radiator fluid. i have learned not everyone agrees with my style, the times critic pete well did not enjoy his experience. i have seen countless people -- this is what guy says. i have seen countless people come to my restaurant, families and and and tourists and even new yorkers looking to get away for an hour or two and had a great experience and a meal they enjoyed. the times did host a 150 person party at that restaurant on wednesday. we are joined by gerri willis and monica crowley. gerri: the new york times is

high town. this shelf goes to diners all over the country. maybe they just didn't like his filed a lot of small business people can relate to this. reviews on the web killing your business. who is in charge? your competitors writing this stuff. stuart: you are a high society -- [talking over each other] >> i am curious to see -- stuart: would you go to the from? [talking over each other] >> there is no such thing as bad publicity although a bad review can kill a restaurant but in this case this might gain a lot of curiosity. a lot of people might want to see what it is all about. gerri: it is not not new yorkers who go to 40 second street for dinner. stuart: we just put him on the screen. is he on the food channel? were those tattoos? gerri: i think so. stuart: okay, all right. we have said enough about that. there's a lot of talk about cutting the defense budget, but

new at 10:00 we have a list of pentagon programs that need to go. israel moving ground troops to data, sending missiles into tel of the. kc mcfarland on israel, on the brink of a wider war in the middle east. back in a moment. look, if you have copd like me,

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stuart: new at 10:00, pork at the pentagon. new report from senator tom coburn says if you want to cut defense spending here is a list of program that really should be targeted. programs that will not compromise national defense if they are cut. the development of a role of version of beef jerky. research on the feathers of an extent bird and workshop on whether jesus's salvation could apply to aliens. we have more and how much money we spend on these projects later this hour. we are talking millions. israel and hamas traded rocking attacks over the gaza strip and troops and tanks to the area. could be the start of a ground invasion. would that lead to a bigger war in the middle east? we have 24 -- below 12-5 on the

dow. here's the friday morning company. monica crowley, gerri willis and nicole petallides on the floor of the stock exchange. let's get to national security analyst kc mcfarland on gaza. >> israel has been attacked, hamas is firing missiles into israel. this could be israel's clint eastwood make my day moment. could take out all the missile batteries. stuart: put the tanks in? >> tanks are on the border and the reserve has been called out, should they get rid of them? it gives them options with iran. if israel were to have a pre-emptive strike against iran's nuclear site, if they're

already gone, there are a lot more options. the thing to watch is egypt. from minister of egypt in the gaza strip right now with hamas and he is potentially talking about three things. we will open the border between the gaza strip and the dividend, military and supplies to come through. will egypt break that 40 year peace treaty with israel? if they do will they join the side of hamas, and the whole regional war. stuart: i don't mean to be crass but this is a financial program and i will ask a crass question. as an investor why should i care what you are talking about? >> it is an unstable part of the world because of two things. iran, israel, the persian gulf, nobody is making any effort to understand and they should, the suez canal is between israel and egypt and a lot of trade flows

between europe and south asia. if you lose the suez canal, very easy to mine the suez canal, the long, narrow canal with bad guys shooting and tankers, that would be a significant economic crisis. stuart: what about the economics, the economy being the driver, i can think of a prosperous north african muslim society, i can think of all of them being poverty-stricken and some in absolute ruins, is that a driver in attacking israel. >> 70% of these are under the age of 30 and don't have jobs. they got rid of one of their dictators and thought my wife is the best my life is going to improve its i get my new government. it has got much worse. >> i know what you are trying to say. general betray us is gone from

the cia, the top guy is gone. president obama, what is going to do? he has just been reelected. we are paying a fortune to egypt, trying to support israel, seems like foreign policy establishment, in a mess. would you agree? >> understatement. >> it is more complicated than that. the two major armies were israeli and egyptian armies. 1973 when they fought each other, and israelis in the united states. both u.s. of 5 armies. what happens in a fight? does the united states resupplied both of them? stuart: when it come to that? a fight between israeli -- [talking over each other] >> i would give odds at 40%. >> one critical point, the egyptian government is controlled by muslims and the presidency and parliament and all the bureaucracies and they

control the military. hamas is the military wing of the muslim brotherhood. stuart: does it give president obama a lot of power if the supplies power in egypt and israel the sort the two sides out? >> put him in a position of having to choose the right hand or the left. >> i think he should set out. >> the problem president obama has, does he support israel and if there is a conflict between the two, a new country, america will outreach to the muslim world, we don't want to take sides. stuart: west one. gerri: isn't the reelection of president obama said this in motion? countries around the region as soon israel could be isolated, obama is always talking about i want space, daylight between us and israel, benjamin netanyahu, no love lost, the crisis over iran potentially coming. stuart: you are going to do a

lot of television today. maybe for the next week too. [talking over each other] stuart: a leading auction house is telling us demand for the best in fine art exceeds the supply. that is why prices are not going straight up. why is everybody buying? are the rich buying part of a tax haven? we bring in a head of impressionist art. back to nicole petallides. facebook shares moving smartly higher. nicole: we have seen executives moving into facebook today and we are hearing about a new tool which theoretically should be able to turn into more revenue for advertising for facebook but directly correlates for retailers and says 1 billion users or whoever, view your ads on facebook and that resulted in a person.

people are viewing the ads and that correlates, and whenever it was, you may use the ad. stuart: even though eight hundred million shares become available for sale, don't worry about it, not many have been put up for sale and they put this new thing for advertising. [talking over each other] >> really, $38, hovering around $20, and hold it now. stuart: we are way below 12,500 on the dow. we are off 64 points on moving slowly down so the obama sell-off continues, we are down 700 points since the election and 12477 as of now. how about this? federal housing authority flat out running out of money.

it will lose $16 billion this year and will likely need a taxpayer bailout. peter barnes in washington. is going to happen. this is going to be a $16 billion bailout. i don't think congress has to approve a bailout. we just give them the money. >> automatic line of credit with the treasury so congress doesn't have to get involved. the administration doesn't have to ask. it could be a trifecta. faherty, freddie and the fha, the last one has $16.3 billion of negative economic value, weird government accounting but pushing back on the idea it may need a taxpayer bailout. it has the $11 billion of additional money coming in new business in 2013 and announcing changes today at noon to head of the treasury bailout. stuart: you might be able to put it off.

all we leave it at that? >> they risk hurting that housing market. if they get it by raising fees they make it more expensive for people to buy homes. stuart: peter barnes in washington. the fda is investigating 13 deaths for possible link to those 5 our energy drinks, and reports of people being hospitalized after drinking them. the company's chief responded to those cases on fox business yesterday. >> if you look through them, there are cases which most of them are ridiculous. i have five our energy yesterday and a stomachache. stuart: there have been similar investigations into monster beverage. are these drinks save. dr. mark siegel, fox news medical contributor in new york. straightforward, are these save? >> they have a potential to be

an save but let's talk about them. 16% increase in how much we sell each year, $8.9 billion industry in the united states, $8 billion industry, separated into two have. on the one half is beverages like full throttle, considered a beverages. these 5 our drinks are considered dietary supplements. with dietary supplements they're obligated to tell the fda if there's a problem and the ceo on fox business is saying every time somebody sneezess and they're taking one of these drinks it gets reported to the fda. he has a point. stuart: this 5 hour energy drink has 213 milligrams of caffeine. [talking over each other] >> i have sat on a program that you know you're getting caffeine. with these drinks the way their market is not exactly something

they are bragging about. i am worried about people who might have underlying medical problems they don't know about, could have heart disease, they start chugging these things. market like a shot. stuart: would you be happy if there was a label that says this amount of caffeine all the way down the line? >> i would be happier. stuart: don't want your patients doing this. >> as long as they know what they're getting. the problem is over-the-counter stock the fda doesn't do much to regulate. i am not a big believer in regulation. that is not my thing. i am concerned about people chugging this. the vast majority of people -- [talking over each other] >> we famously have carl cameron drinking one red bull after another and people get by with this but it is not something i would advertise. stuart: have you ever done a 5

hour energy drink? gerri: no. >> i drink coffee. [talking over each other] >> stock is -- essentials coming down which make this. stuart: you would be happier if you knew what we were drinking with a label on the bottle. >> i want people to tell physicians what they're doing. don't only, with prescription drugs you are taking the time when you were drinking. stuart: you want people to go to the doctors so they paid $50 to walk through the door, am i doing right thing? 5 our energy drink, you want $50. >> $50, you get more than that. and talk about the amount of money -- stuart: play not your own book. a pleasure having you. [talking over each other] >> it is on the house. stuart: have i got nerve or what? america is turning into an entire nation. record number of people now collecting disability benefits. exactly how many of them are

faking it? how can you tell if they are? a man who investigate and catches the people committing insurance fraud.

stuart: it is the stock market slide and continues friday morning. dow jones industrial average is below 12,500, loss of 46 at the moment. interesting report on industrial

production, factory output down in october, superstorm sandy is blamed for that. only three days before the end of the month, and the analyst play in all these things weighing enough. we will see what happens. today's the day hostess died. iconic american company dead closing its doors liquidation. and they give in and make some concessions. somebody will probably buy the brand. we're back in 90 seconds, a private investigator supreme. t, scuba diving the great barrier reef with sharks, or jumping into the marke he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens,

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stuart: leaders of the house and senate are going into the white house to meet with president obama on the fiscal cliff. house speaker john maynard arrived moments ago. headlines or leaks from the meeting will probably move the market. more than eight million people are currently collecting social security disability benefits, 1.3 million of them qualified because they have mood disorders, 1.three million. joining us is -- you shared some of your secrets for catching people who are faking back injuries. how would you catch people who

may be faking mood disorders? >> i catch them at their weakest point. what i try to do is a subject that is alleging something, a mental disorder, and have a conversation and a lot of times they like to talk about, they find julie. stuart: it is the private side, somebody claims a disability from insurance company, you figure out whether they are legitimate or not. we are talking about social security, disability, a government function and this is mood disorders. if you want to track down fakers you do the same thing, literally talked to them. but put your arm around them. you are not really depressed. ? >> i may take my dog for a walk in my neighborhood and strike up

a conversation. people like to talk to me. if you're at a bar offer them a drink and start talking. what do you do for a living? they will open up and started discussion and video and audio tape the conversation, have the evidence to move forward. stuart: you have a camera in your but hold? [talking over each other] >> of course. we have all this technology and experience. stuart: you have to spend enormous amounts of time proving that mental disability or mood disorder. how much time do we spend on each subject? >> it all depends on the situation. sometimes 20 hours or 50 hours but most of the time it depends on what the subject has collected, how important the case is to the agency. >> aren't people ashamed? >> most of the time they are not. most of the time they are not.

most of the time they are flipped that they beat the system. they're smarter than the system. >> the system is there to be beaten. the federal government needs to contract with you to ferret out fraud in medicare and social welfare programs. sweeney you. stuart: i will put it to you bluntly. you cannot ferret out fraud successfully won a comes to mood disorder. it is very difficult. stuart: very difficult. stuart: 1.3 million people get a mood disorder payments. i don't know how many are fraudulent, no way of knowing that. simply don't know. but if they were faking it you really can't catch them. almost impossible. >> almost have to get a confession. >> how you do that? stuart: >> strike a conversation.

stuart: there are 1.3 million people. stuart: you may find they claim they can't work because of a disability, but they're doing something off of the book somewhere so in the course of my surveillance i find they are doing something off the books they shouldn't be able to do because of this authority. stuart: i am told in the private sector when you make an insurance claim for disability, you make a claim you are no longer able to function sexually. i hear that is a big claim. >> that is a claim. stuart: how do you prove someone is taking that? >> i won't give you those -- that is extremely difficult. stuart: if i claim sexual dysfunction for example, i am pretty much home free. >> i would not go that far. stuart: i have got you. the best in the business and i got you.

>> what percentage would you say is actually real illness? there are people who suffer real mental illnesses. among those you are investigating what is the percentage? >> i really don't know. in terms of the cases we have investigated maybe 25%. stuart: always a pleasure having you and we are waiting for the government call to come through. i am have another prediction on the fiscal cliff. that will be the subject of my take and it is next. with the fidelity stock screener, you can try strategies from independent experts and see wh criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments.

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>> we have seen the writing on the wall but refused to confront these costs and this is another good example of labor problems in the way. 80% of the post office cost come from this labor burden for the workers and the fact they're unwilling to make concessions. stuart: the last hour on union workers sinking their employers. that happen that hostess, a great american company which died today. check the markets, we are still down by not as much. back above 12-5. game stop, video game retailer is up today despite a lack of sales in the video game

business. >> they put out some uncertainty, the industry has been down. however, let's talk about game stop. profits beat the st.. the stock is up 3%. now call of duty black hawk 2 on my son's, the list is selling out like crazy. another issue is the nintendo we which is a new unit, questioning whether there will be a supply for the demand. there's a little uncertainty around holiday season but game stop is top. stuart: thanks very much. auction house christie's tells us demand for the best -- it. so why is everybody buying? is it a tax haven ahead of the financial cliff? we will get answere an answer 1s morning. all right, let me say right from

the start i was wrong about the election. i said governor romney would win. maybe i should keep my predictions to myself, but i can't stop off in my judgment of the biggest issues of the day. so here is my take, my opinion, my forecast. i do not believe they will be a huge tax increase in spending cuts come january 1. i do not think we will go fully over the fiscal cliff. i think there will be a deal, the president will get his way and the republicans will cave. spending cuts will be promised, but the future, that is what i think will happen. why my going out on a limb like this? i can see the writing on the political wall. think of what will happen at the end of december. republicans still holding out against taxing the rich. the president says you are pushing america into recession

just to protect your millionaire pals. i won the election, you back off. that is applying political pressure big time. it is political maneuvering with the president holding the upper hand. that is why i think there will be a last-minute deal. republicans retreat and taxes go up. please understand, i think this is a mistake, it is a bad policy. it will not grow the economy come it will not grow the deficit. but the political power shifted back into the spending and borrowing. i do hope i am wrong again. having you ship my gifts couldn't be easier.

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>> i want to welcome the congressional leadership here and thank them for their time. i think we are all aware that we have some urgent business, we have to be sure that taxes don't go up on middle-class families, that our economy remains strong and create jobs and that is an agenda democrats and republicans and independents, people all across the country share. our challenge is to make sure that we are able to cooperate

together, work together, find some common ground, make tough compromises, build some consensus to do peoples business and what folks are looking for i think all of us agree on this, they want to see we are focused on them, not focused on our politics in washington. so my hope is this will be the beginning of a fruitful process where we are able to come to an agreement that will reduce our deficit in a balanced way that we will deal with the long-term growth and also focusing on making sure that middle-class families are able to get ahead. i want to thank the leadership for coming, and with that we will get to work. thank you very much, everybody. actually there is one other point i wanted to make, that is my understanding tomorrow is

speaker john boehner's birthday. for those of you who want to wish him a happy birthday, we will not embarrass him with a cake because they did not know how many candles were needed. >> right, right. >> but we did want to wish him a happy birthday. stuart: that is the photo op basically be fo before the hard bargaining begins. i did pick up it was john boehner next to the president and the president went out of his way to say we want a balanced approach. that means tax the rich. >> taxes go up, increasing revenue, which we already have no word on entitlement spending. no time like the present. the dollar now down 26. know in part on the from that. >> not raising taxes, and the

second element of this which has not been part of the public conversation is cutting spending. we don't have a revenue problem, have a spending problem, no issue with cutting spending. stuart: i said taxes on the rich will go up. are you going to disagree with me? >> depends on what you mean of taxes going up. i don't think republicans are going for that, don't. stuart: whether they are forced into it? >> than we are going over the cliff. >> don't think republicans have sacrificed that sacred land. stuart: who turned full circle? >> i do, i think the president

has drawn a line in the sand. i have two or three chess pieces on the board, i win. these are photo ops. stuart: that means nothing. utterly meaningless. you say we are going over the cliff? >> from a political standpoint of republicans agree to raising the top rate, they're done as a party. stuart: that will be the last word. a leading auction house tells us demand for the best exceeds supply. that is why prices are going up so much. we have with us the head of impressionist art in new york city. welcome to the program. >> thank you. stuart: you have a successful auction program raising hundreds of billions of dollars. how much?

speak almost $770 million over the last two weeks. stuart: that is a great deal more than you expected to bring in, correct? >> it is. over the combined for the last two weeks. stuart: the prices paid were higher than the sellers were expecting, correct? >> then we could have advised them, yes. stuart: i want to ask you for a value judgment, why do you think prices are up so much? why do you think relatively wealthy people are putting their money in fine art? >> they believe that it is a long-term stable class. we see that over and over and that has been a global phenomenon. stuart: 100 million more than you were expecting means there is a mass influx in this, they really believe in this thing. >> or that our collectors are competing ever more aggressively for the best work and we put

forward exceptional quality work across the board the last two weeks, everything from monet to warhol and people gravitate toward those pieces. stuart: this is fine art. not kidding the speeches, just trying to get to grips with the fine art. what is that one on the screen? >> that is warhol statue of liberty. $39 million, with buyers premium comes to $43.7 million. in the auction room. stuart: in the new add-on what? >> 4.7 buyers premium. stuart: you charge $4.7 million for auctioning off a $39 million painting.

>> there are costs involved. we sent that around the world to be viewed. stuart: i got you. from a seller's point of view, obviously a very good price, but are they selling now because they take the profit now and this year's lower capital gains rate than next year? >> there has been a lot of speculation about this, and surely it is something we are seeing a lot of. missing inoperablwe are seeing . it is fundamentally what people are choosing to sell. a lot of discretionary selling. stuart: you deal with fine art, but can you extend across the whole art spectrum? is everything going up as an asset class? >> that would be a generous statement, i think.

a lead-in for all that we sell. stuart: this is where it is out, so to speak. >> this is where it is at. stuart: so, leonardo. >> we see that. rare and wonderful objects will always drive prices. and jewelry, for example. jewelry is doing extremely well. i am not an expert in jewelry. stuart: you know diamonds and fine jewelry are going up. it is interesting to hear you used the phrase asset class. >> it is. stuart: be o having a big sale coming up? >> we always do. we have one in london coming up in february. stuart: who is buying? >> everyone. all over the world. my expertise particularly last week fo the buying over 50%

american. stuart: fascinating. come again, very interesting stuff. appreciate it. mitt romney said he lost because president obama promised gifts, but did he really lose because the g.o.p. had an image problem? we will deal with that's next. the dow is down eight.

stuart: down, not by much. remember, it was down 700 since election day. sears down big time this morning down $500 billion. how much is lost in the quarter, half billion. smart phones popularly hurting the sales of cameras and mp3 players. nike up. back in 90 seconds, we're talking about rebranding the american party. if you do it, what will you rebrand next?

stuart: facebook. early up sharply now up over $1.20. why is facebook up, nicole? nicole: insiders had the opportunity to sell did not necessarily do so. just because you're allowed to sell does not mean you do. that is a nice vote of confidence. again over 6% the new tool which will be able to track users with a click on an ad and make a purchase following that good for marketers who want more advertising. in watching this level, the

resistance. talk about resistance 2454. it was a nice run-up, so the question is whether or not it can break through that resistance level. stuart: any stockholder will be happy to see that. thank you very much indeed. republican party has an image problem? some are saying that. joining us now is the cofounder. good to see you again. i read the research and i think you believe the g.o.p. should rebrand itself, make it more attractive to women and minorities. tell us how they will do that. >> if i may, my job is to grow the brand. i have to bring more people to the party.

romney and the g.o.p. did a great job convincing americans you could grow the economy, create jobs and reduce the deficit but they missed the human side. the lasin the last few weeks ofe election, women felt more strongly than obama have their interests at heart and younger people felt that obama treated people more fairly and they belong with other people, but those advantages went like this. stuart: i get the point you could say young women were basically walked with free contraception. hispanics were bought with amnesty. he won the g.o.p. to turn around and say we are for free contraception, we are in that game. open borders.

if that's wha that what you wane republicans to do? >> absolutely not. when we look at one measure of hispanics, obama 30% advantage in helping to feel free and independent, core american value and a pillar of the republican platform. it is not that you are set to abandon our core virtues, but you have to work harder at making the connections with people so they can buy in. stuart: it is a communication problem, the approach to campaigning, isn't it? that is what you were going to say? >> communications and messaging. leadership of the g.o.p. stuart: were both kind of shaking your heads here. >> it is not marketing here.

the party needs a way to talk about these issues that everybody understands. but can it walk the walk and talked the talk but not for regular americans. i don't think it is rebranding it as needed. >> to pick up on that, has been very successful in countering the arguments in emotional terms throwing grandma off the cliff, yodon't want to drink dirty wat. republicans have argued in colfax and figures, 8% unemployment. we need to be making more personal case every single american about freedom and freedom is the core issue. stuart: how about that? campaign on prosperity and freedom and reach everybody that way, what do you say? >> monica is right on. right now if i'm a 25-year-old,

everybody looks at me, you have to communicate those values in a way people can connect and buy into it. stuart: thank you very much for joining us. appreciate it. billions of taxpayer dollars researching jesus, salvation and you heard it right here. more on that next. what makes the sleep number sre different? you walk into a conventional mattress

store, it's really not about you. we have so much technology in our store to really show the customers what's going on with their bodies. you can see a little more pressure in the shoulders and in the hips. ... now you can feel what happens as we raise your sleep number settingnd allow the bed to contour to youindividual shape. oh, wow. that feels really good. at sleep number we've created a collection of innovations dedicated to individualizing your comfort. the sleep number collection, designed around the innovative sleep number bed - a bed with dualair technology that allows you to adjust to the exact comfort your body needs. each of your bodies. so whatever you feel like, sleep number's going to provide it for you. during the final days of our semi-annual sleep sale, save $500 on our classic series special edition bed set plus special financing on selected beds but hurry sale ends sunday. you'll only find the innovative sleep number bed at one of our 400 stores, where queen mattresses start at just $699.

stuart: president obama meeting with congressional leaders right now. rich edson is there at the white house. i suspect he may be wasting your time a little. i don't think there'll be any kind of a deal until the last week of december or even new year's eve. >> have to agree with you on that one. i think i will be standing right here in a month and a half talking about the same thing except a little bit more sense of urgency and possibly a little sense. stuart: by the way, we saw the photo op with the president with john boehner, take it the senate democrats are there as well, they are all there?

>> at his house minority leader nancy pelosi, harry reid, treasury secretary, vice president and senate minority leader mitch mcconnell. stuart: they will be in that spot until the end of the year. another report on government race, the defense department spending $6 billion on nonmilitary research. projects in a million on things like jesus hating fictional space aliens and developing a rollup version. this is the defense department, this is the pentagon. >> we have always argued every corner of the government in every bureaucracy has government abuse in the finance department is not exempt of that. this is another example of out-of-control spending that has gotten $16.2 trillion. remember the stimulus spending,

we were paying for things like shrimp, and now every week it seems you are all reporting more on these stories and they never learn. republicans a fiscal cliff conversations should be demanding serious spending cuts. >> i agree. this is our money, fiscal money, taxpayer dollars at work. stuart: more with the company next. @

stuart: time for the highliiht reel. all charles. stuart: mitt romney told his big donors he cannot compete with gifts president obama was offering. i did not fit well with charles. >> is not going to work.

they have to yell, those are wooden horses, did not let them in. stuart: gifts to various blogs of people help president obama win reelection. >> it is not a gift, it is a perk. it is a curse. we all want free stuff, what about in washington right now? stuart: why don't you bring that kind of fire to the program? thank you very much for being with us today. it is yours. dagen: and no expletives. thank you so much. i am dagen mcdowell. all talk, where his action? the big action on avoiding the spending cuts and tax increases. more